Venezuela businesses deal with power cuts

MERIDA, Venezuela — Who would want to eat ice cream that tastes of smoked trout, hamburger and hotdog, or fried duck?

Apparently tourists from all over the world. At the Coromoto Ice Cream Parlor, hundreds of bank notes from various countries are pinned to a notice board — a testament to this local institution’s popularity.

Visitors flock here to sample some of the 860 flavors that have won the Coromoto a place in the Guinness Book of Records as the ice cream vendor with the greatest variety of flavors. Others simply marvel at the range of Coromoto’s imagination.

Quite a few try the more unusual fare, said manager Jose Ramirez. “We have ice creams made from prawns, squid, oysters, every kind of fish — people like them.”

But while this bustling business has little difficulty in attracting customers, it has had to contend with power cuts that have left its deep freezers turned off for up to three hours each day.

Venezuela is undergoing an electricity crisis caused by what critics of the government say is chronic underinvestment in the sector and exacerbated by a drought that has only recently abated. Venezuela's economy contracted 5.8 percent in the fourth quarter of 2009. Analysts predict electricity rationing will have a further impact on industry and small businesses this year.

Since late last year, the government has been forced to impose power-rationing schemes. Merida state has been one of the worst affected areas.

In the corner of the ice cream parlor stands a small electricity generator that Ramirez says he uses for lighting the shop during the blackouts.

Because the ice cream is so tightly packed it takes a few hours before it begins to melt, said Ramirez, so he does not use the generator to power the freezers, which would be costly. “If the power cuts were to last more than three or four hours it would be a problem.”

Other businesses have not been so lucky. At the Divine Child butcher’s, Eliana Sanchez says she cannot afford the cost of a generator to keep her goods from going off. She complains that she has had to throw out easily perishable goods such as chicken and fish.

“I work with a type of product that needs constant refrigeration,” she said.

Straddling the Venezuelan Andes, Merida’s primary industry is tourism, which this year has been hurt by electricity cuts. Renate Reiners, manager of travel agency Natoura, said business came to a standstill during the power cuts. Flight reservations are lost and clients’ emails cannot be answered, she said.

“In the hours we can’t work we try to do other things,” she said. “We have to warn our clients it might take longer to respond to them because of the rationing.”

Tovar, a town 86 kilometers southwest of Merida city, went five days without electricity after a transformer failed.

Venezuela relies on hydroelectricity for about 70 percent of its power. That’s why a drought brought on by the climatic phenomenon El Nino has hit it so hard.

Critics say the government has failed to add further generating capacity during its 11 years in power and has not diversified into other forms of power generation as back up.

President Hugo Chavez, however, maintains that the crisis was due to the drought and last week announced the suspension of rationing. He accuses the opposition of taking advantage of the crisis to score points against him. He even alleges sabotage.

“The squalid ones (opposition) are crying now,” he said as he announced the end of rationing. “Let their tears turn into water so that the reservoirs can rise.”

With the World Cup underway and crucial elections parliamentary elections coming up in September, his detractors accuse him of trying to boost his short-term popularity, which has suffered a large dent this year thanks to the crisis and its economic impact.

The Office of Interconnected Systems Operation, the body that oversees the various state companies that make up the national grid, reports that 658.3 MW of generation capacity were added or repaired between January and April of this year to a total capacity of 24,000 MW.

However, Electricity Minister Ali Rodriguez said the government had invested $4 billion dollars in the sector since the crisis and hoped to install 15,000 MW by 2015.

Chavez is “sweeping it all under the carpet because it’s a year with some very important elections,” said Daniel Varnagy, an energy analyst at the Simon Bolivar University. “According to some meteorological predictions 2011 is going to be a much drier year.”

The likelihood is that once the elections are over Venezuelans will have to incorporate rationing into their lives once more, said Varnagy.

But that was a distant concern for customers at the Coromoto. Belkis De Marquez, 38, from Yaracuy state, was on vacation in the mountains and had selected the rose and fig flavor. “This is the second time I’ve been to Merida and I always come here because I heard about the lentil ice cream,” she said. “But I don’t eat it — it’s too strange.”